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Arrowhead’s Future Could Now Ride on Progress of Amgen Partnership

Xconomy Wisconsin — 

After canceling three liver drug programs and slashing its staff, Arrowhead Pharmaceuticals has nothing left in clinical trials. But a separate partnership with another biotech company, Amgen, could signal where Arrowhead goes next.

The strategy shift became necessary after Arrowhead (NASDAQ: ARWR) said Tuesday that it would halt work on its troubled liver drugs, which had suffered delays amid FDA questions. After Arrowhead decided to pull the plug on those drugs, the company’s stock price took a beating, tumbling more than 61 percent in after-hours trading. The drop off continued Wednesday; Arrowhead stock closed at $1.44 per share, down another 14 percent.

Now industry analysts and observers have started to ask—and predict—what will come next for Arrowhead. One company they expect to have a significant bearing on the future of Arrowhead is Amgen (NASDAQ: AMGN), the large biotech based in Thousand Oaks, CA. In September, Amgen and Arrowhead announced a collaboration aimed at developing and commercializing two drugs to treat cardiovascular disease. Under the terms of the deal, Amgen agreed to give Arrowhead $56.5 million in upfront cash and stock payments. Arrowhead could receive an additional $617 million from Amgen in the form of future payments tied to development, regulatory, and sales milestones, the companies said at the time.

In a research note, analysts at RBC Capital Markets wrote that Arrowhead’s decision to change course could push back the company’s timeline for developing and commercializing new treatments by up to three years.

Arrowhead has long focused on bringing to market therapies designed to attack viruses using ribonucleic acid interference (RNAi), which destroys messenger RNA from viruses before the infected cell turns those RNA into proteins that propagate the infection. This interference is also known as “gene silencing.”

All three of the candidates that were shelved contain EX1, an Arrowhead-developed drug delivery vehicle that is administered intravenously and targets the liver. Earlier this month, Arrowhead said it had learned from the FDA that multiple non-human primates died in a study involving EX1. That was likely a factor in the company’s decision to turn away from drug candidates containing EX1.

Arrowhead said it will instead now focus on therapies administered in other ways, one of which is the company’s subcutaneous (subQ) RNAi delivery system. The programs Arrowhead is co-leading with Amgen are the first involving drug candidates that use the subQ platform, the companies said in September.

According to the RBC Capital Markets research note, Arrowhead and Amgen might not get the FDA green light to start clinical trials on one or both of the partnered cardiovascular disease treatments until 2018.

Even though the two Arrowhead-Amgen programs were announced simultaneously, they are somewhat different in nature. Under the terms of one agreement, Amgen will receive an exclusive license to a program developed by Arrowhead that’s aimed at using RNAi molecules to lower levels of lipoprotein(a). That’s a type of cholesterol that can put patients at risk for heat disease, blood clots, and stroke.

With the other agreement, Amgen receives the option to exclusively license an RNAi therapy for a genetically validated target that the companies have yet to disclose. At the time of the announcement, one group of analysts speculated that the undisclosed target could be ASGR1, a gene that Amgen has published on in the New England Journal of Medicine. Another observer, writing on the stock market website Seeking Alpha, said the target could be PCSK9, a protein that interferes with the body’s ability to clear low-density lipoproteins—the so-called “bad cholesterol” that can clog arteries—from the bloodstream.

Arrowhead does have other drug development programs outside of the Amgen … Next Page »

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